A big bite out of rail funding?

PROVO — A recent House bill that proposes cutting sales tax on food has Utah County leaders worried the county's commuter rail project could be in jeopardy.

HB282, which excludes nonprepared food from some local sales and use taxes, could result in a 10 percent decrease in anticipated funds the county would receive from its recently approved quarter-cent sales tax increase for transportation projects. The decrease translates into millions of dollars less per year that the county will have to put toward road improvement and commuter rail, county leaders said this week.

"We've lost $3.3 million we could be spending on transit (if the bill is approved,)" County Commissioner Steve White said. "That's a significant amount of money."

And the cost of that loss would exponentially increase over time, said Mountainland Association of Governments executive director Darrell Cook.

"If you look at the compound effect of that (10 percent decrease) over the 30-year life of the bond of this project, that's a $132 million hit," Cook said. "That's staggering."

In terms of mileage, losing 10 percent of the county's anticipated funds could result in a shorter commuter rail, said Cook, who oversees Utah County's regional transportation planning organization. If the trip from Salt Lake City to Provo is 44 miles, then a 10 percent decrease could theoretically stop the rail in Orem, at Utah Valley State College, instead of in Provo, as is the current plan.

The other more likely option would be to extend the life of the county's bond for the project for another eight years and complete the project all the way to Provo. Cook says extending the life of the bond for that length of time will add about $79 million in interest.

It would also delay plans to bring the commuter rail to the southern part of the county.

"When you're at this point in time, you say to yourself, 'Where do you cut?"' Cook said. "We don't want to (cut projects). We want to do anything and everything we can do to do everything."

Because HB282 targets certain local taxes as those that will be excluded from generating tax revenue from food sales tax, it is referred to as a "boutique" tax. The tax also affects arts and parks taxes.

The bill, which has so far passed in the House and will next appear in the Senate for approval, is intended to be a general tax cut for the cost of one of life's basic necessities. The bill is also intended to establish a fund for rural health-care facilities.